GI127: Why You Need Asset Protection with Attorney Brian T. Bradley

GI127: Why You Need Asset Protection with Attorney Brian T. Bradley

Brian T. Bradley is a nationally recognized Asset Protection Attorney for High-Risk Professionals, Entrepreneurs, Real Estate Investors and Ultra High Net Worth Families. He was selected to the Best Attorneys of America List 2020, Lawyers of Distinction List 3 years in a row and Super Lawyers Rising Star List.

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Transcript:

Announcer:
Welcome to the Global Investors Podcast, a show that focuses on helping foreign investors enter the lucrative US real estate market. Host, Charles Carillo, combined decades of real estate investing experience with a professional background in international banking to interview experts in all areas of US real estate investing. Now here’s your host, Charles Carillo.

Charles:
Welcome to another episode of the Global Investors Podcast; I’m your host Charles Carillo. Today we have Brian T. Bradley. Brian is a nationally recognized Asset Protection Attorney for High-Risk Professionals, Entrepreneurs, Real Estate Investors and Ultra High Net Worth Families. He was selected to the Best Attorneys of America List 2020, Lawyers of Distinction List 3 years in a row and Super Lawyers Rising Star List. So thank you so much for being on the show, Brian.

Brian:
Well, thank you so much, Charles, for having me on, and it’s an important topic and you know, like I want to get out of the way, like I’m not anybody’s legal guru. And we’re really living in a fascinating time right now. And we’re seeing is in policies drastically changing every day and people getting sued and being sued that normally wouldn’t be getting sued. So protecting your assets is more important now than ever. And so I just hope that the concepts that we talk about and that I break down help you and your listeners in this crazy maze of asset protection. And I’m definitely gonna be blowing up a lot of the status quo and misconceptions.

Charles:
Yeah, I appreciate that. Cause as we were talking before filming it was something that you hear from a lot of these programs and mentor groups out there that a lot of that information isn’t as good as it’s explained to me. And I think people that don’t have any background in it, they just take that kind of for word and and they just do it that way and find themself years down the road, possibly in some situations. So

Brian:
Yeah, it just creates a false sense of security where like I’m a trial lawyer by trade. And so I look at things as if I have to go in and protect this and argue, you know, like what, what’s the case I’ll actually say on this, what’s the probability of success. And you know, like at the end of the day you create these for when you are being sued, you want them to actually have the value that paid for. Nice.

Charles:
So give us a little background on yourself, both personally and professionally before getting involved with your current firm. Yeah.

Brian:
As you said, I’m an asset protection attorney. I grew up in the mountains in lake Tahoe as a snowboard, you know, BU and then went to Arizona for baseball, ASU hurt my arm, decided to go into law school and became a really good trial lawyer coming outta law school economy, tanked and sort of had to go outta my own and create a business and learn how to run a business while, you know, sculpting up a trial practice. And by just being in court so much, I realized that people kept having these false on social security. And what we do is now help protect investments and protect your wealth with this fancy word called asset protection which I can break down what that actually even means in a minute. And I got into, you know, this really niche of all niches asset protection, just from the litigation and trial side of law and having clients being sued and their lives just turned completely upside down with this false sense of security.

Brian:
Most of them were coming to me after they’re being sued and asking, Hey, what can you do? And at that point you’re really just too far down the rabbit hole, you know, like then you’re looking at arguments of fraud and hindrance, and I see what’s contributing to this false security. It comes from people thinking that you know, they don’t need to do anything and just ride lady luck. And they’re saying like, oh, you know, I’m not a bad person. I haven’t been sued yet. But that’s not a plan that’s just wishful thinking. Or they think that, you know, their insurance will always cover them. It won’t, you know, it’s important to have and you need to have it and you need to get good insurance, but it’s, you know, hard to even believe that even just over, you know, the last few years, how many calls we’ve had over you know, car access and people with claims that are just radically in excess of their insurance amount coverage.

Brian:
And so they’re, you know, being underinsured is big problem, you know, or they forget to level up their insurance as their wealth and assets level up with them, you know, or having an umbrella policy. But people think that, you know, an umbrella policy means it just covers everything else and it doesn’t, mm-hmm <affirmative>, you know, it really just provides excess coverage, that’s it to a certain amount or a big one is that they think that their family is state plan known as a revocable living trust will protect them, which they can’t, they’re not designed to, you know, they only come into effect once you die to avoid probate or the really big one that I think we’re gonna spend a lot of time breaking down this big misconception that, you know, they think that they can just stick everything into an LLC and that’s the silver bullet, but they missed the first letter first word limited. And so we’re just living in this legal system that I call a Sue happy Nirvana. And now, you know, the law isn’t about justice. It’s just a, you know, a new multi-billion dollar business or industry that has profit lines. And so what we’re doing with asset protection is just creating peace of mind, protecting people’s lifestyles and really just how collectable you are and, and the firm that I created and, you know, collectively now we’re protecting over about 5 billion worth of assets. And so that that’s me in the nutshell.

Charles:
Okay, cool. Cool. So I was doing some research on the on this whole topic before, like getting on with you. And there’s been like a lot of changes and cultural shifts in the us legal system during the a second half of 20th century that really paved the way for this current legal environment this crazy CRE legal environment that we found ourselves in today. So can you kinda like outline just like an overview of like what’s changed from the last 20, 30, 40, 50 years that makes asset protection in actual industry and why it’s so important?

Brian:
Yeah, absolutely. So like, I think the first way to start it even is like, what is this weird word asset protection? Cuz it never was called that before. It was just, you know, different variations of estate planning. And so asset protection as it is now is not traditional estate planning. It’s modern estate planning. What we’re doing is placing a legal barrier between your assets and a potential creditor before it’s needed. And that’s like the keyword before, you know, that’s, it, it’s just like a barrier, like a safe for your gold or your guns or valuables, anything of value you wanna put behind the legal barrier and out of your personal name. So that’s not easily attached with the lean or reached by creditors, just like the rich, you know, like the rich don’t own things in their own personal name, their businesses own them, their estate plans.

Brian:
Do they just get the beneficial use and enjoyment out of them while separating out the liability. And so to go like more specific into your question, the old systems drastically changed over the last 40 years because it’s no longer about justice, but it’s about redistributing your wealth from the haves, which are you to the have nots. I mean, we can just turn on our TV any day now and see how, you know, things are outta control now. And so now for people who grew up with a more old school mindset where lawsuits really were never an issue back about 40 years ago, then you could have essentially have everything into your own personal name or your family trust. That was almost acceptable back then. But over the past 40 years, the litigation landscape has just completely changed and things that didn’t happen in the past or that weren’t allowed to happen in the past, like contingency fee lawyers, you know, or law firm advertising are now commonplace.

Brian:
These two things just themselves created law firms that are purely sales and profit driven. And it created a cultural shift, a predatory legal system. That’s no longer about justice, but purely profits. Like you can literally drive down the street in some states and see billboard that says like, have somebody to Sue call us, we’ll find out like it’s just, and so in the us, we don’t have a, if you lose you pay system, so it’s not designed like that, but other countries do so you have no skin of the game. So you just have these, you know, plaintiffs who find predatory lawyers who then file, you know, random lawsuits on someone who has deep pocket. And so asset protection is your modern best bet to level that playing field by using all the different legal tools we have. And what it does is just makes it very hard for creditors to actually collect on you.

Charles:
So let’s talk about, I mean, we were talking this before and this LLC and every real estate investor, I mean every, because I think LLCs are used, especially see when you’re in syndications. I mean, there’s so many different LLCs that we use between holding the property and all the different general partners and stuff. But I think most people when they’re starting to invest in real estate, they’ll have one LLC they’ll hold multiple properties in it and it’s LLCs owned by in their name and they feel that everything’s fine. So can you kind of disprove that whole, that whole myth of the LL and the, and like you said, limited liability of it.

Brian:
Yeah. So this is a great place to start. I think that this is the tool that you said most people are familiar with, but it’s just the foundation, you know, it’s entry level protection, 1 0 1. So let’s go over the key concepts and the tools we use. And so like we have LLCs limited liability companies, LPs limited partnerships and asset protection trust. And then I want you and your listeners to think about winter. You know, when it comes to asset protection, we have different layers, you know, like the first layers of base layer and it sits on your skin, that’s your LLC. Then you want a mid layer, which is usually a little thicker made out of some kind of like wool or marina wool. This is a management company or a limited partnership. And then you want an outer shell waterproof layer. This is gonna keep you nice and dry and warm when the weather’s really bad.

Brian:
This is an asset protection trust at that point. But by layering, what you’re now doing is being more flexible, cuz you can adjust and make yourself more calm. And so this first layer, the base layer, as we, you know, I mentioned is your LLC, that’s gonna be holding your real estate and the risky assets, you know, we know about LLCs and the benefits of them. So I’m gonna spend more time breaking down these misconceptions and the unspoken prob you know, problems, you know that as you grow, your wealth grows, you, you understand these reason, like the purposes of the protection will change. The first problem generally is that most clients have single member LLCs and they’re all set up in their personal name. The problem here is that courts now, especially nowadays and on the coast, like east coast, west coast have a tendency to disregard a member LLCs.

Brian:
And so because of this, they’re basically worthless. You know, I still use them, don’t get me wrong, but only as a base layer protection or for someone who is just starting out buying their first asset. And what you actually want then is that single member LLC, that’s holding, you know, like your real estate to then be owned, not by you individually, but by a second layer of protection, which should be like a multi, a multi-member limited partnership. And by doing this, what you’re doing is now properly layering, the protection, your mid-layer limited partnership will be owning all of your LLCs as you grow. So like you have one LLC, couple units, you’re gonna scale up, have another LLC with a few more units and all those LLC tax filings and K one S will just simply simply passively flow directly through to the management company.

Brian:
So you’re only gonna end up having one tax filing, not like some clients with me have 15. And so we’re maintaining the legal protection, but we’re disregarding them for tax purposes, creating a smooth and easy transition, fewer tax returns by adding that second layer, which is holding, you know, which is that holding company limited partnership. And then for 90% of the clients, you only need one limited partnership or one holding company. But if you’re really complicated or you have a big mix of real estate and different corporate business entities, or you’re also a doctor doing surgery we may want to have two holding companies since the businesses may want to actually have a better tax structure or corporate planning. That just depends on the individual client profile. And then we’ll just talk to your CPA and see what, what fits the next big problem comes down to the, you know, you, you hear people talking about charging order protection.

Brian:
And it’s a just basically comes down to where do I set these things up in? Like I go to Delaware, Wyoming, Texas, Nevada and really, it just comes down to what you hold, what you own and where you own it. Now I’m gonna pick on California a lot here just because it’s a big state. A lot of people live there. California’s very expensive. So most people buy property somewhere else. And so let’s say you’re a California resident, you know, and as California real estate that you own, and you create a Wyoming LLC, because you heard on the internet or you attended some seminar you know, that that’s where you’re supposed to go by putting in your California real estate. What you did is you is convert your Wyoming, LLC into a California LLC, because you are doing business in the state of California.

Brian:
You have to register and pay the franchise tax in California. If you’re getting sued, you’re gonna getting sued through that property, which is in California. You know, the judge in that case is gonna use what law, California law, because that’s where the asset’s at. That’s where the person’s at. That’s where the, the injuries hap happened at that’s where that state’s jurisdiction is at. So a, a, a judge in California or any other state, let’s say it’s in Tennessee or Ohio, they’re just gonna use the state law where the assets at and the lawsuits coming through. They don’t care that it said Wyoming or Delaware, LLC, if you have no direct jurisdictional connection there <affirmative>. And so just by simply owning an out-of-state LLC, you have to register that LLC as doing business in any other state that you live in. And so you’d have to register it for example, in California, if you’re a California resident and this is just basic law.

Brian:
And once you do that, you did this fancy legal word called a avail yourself of the privileges and of that state. And given that state jurisdiction over your LLCs and the assets that they’re in. And so, and there’s case law on this Indian, it was Indian palms country club associates, first anchor bank in 2015, this case lays out all the multiple standards that you’d have to meet to successfully actually beat piercing the corporate bail argument and jurisdictional elements and real estate’s different just by owning real estate in an LLC, because it’s supposed to be passive. You’re not gonna be operating out of it. It’s not a business. It’s just an extension of yourself. Then you’re registering that business in the state that you live in, availing yourself of those state rights. So general rule of thumb, put your real estate in the state that the assets in, and then you just adjust and scale up your protection.

Brian:
As you grow the third really big misconception. I probably get two or three calls on this. A day is called anonymity. And thinking that you can just create, you know, anonymous Wyoming, LLC, and just disappear and completely ghost to lawsuit. And this is just completely false. That’s how you’re gonna get a, a default judgment against you. But I get these questions all the time. And so when your LLC is sued, you’re gonna be legally required to appear and defend yourself in court. You actually have to, to properly create these you know, Wyoming and Delaware LLCs or out-of-state entities have what’s called a personal agent of service, their sole job, which you have to pay for in addition to it is to just say, Hey, congratulations Charles, guess what? Your LLC just got sued. Your served. Now go find a lawyer and defend yourself. Once that happens.

Brian:
There’s no more anonymity. You have to show up and appear and represent the LLC in court. At that point, discovery, the discovery process begins, and a judge is gonna say, Hey, here’s an asset disclosure list. Tell us all the assets that you are the LLC own. At that point, you do one of two things. You lie and commit perjury and say, we own nothing. Or you disclose all of your assets. And so this conception of anonymity and just ghost lawsuits and not disclosing your assets is just a real quick shock, you know, shock to perjury.

Charles:
Hmm, interesting. So if with you’re not worried about the charging order at all. So if you have a property that’s owned by an LLC and then the LLC is owned by this holding company, then you’re not the charging order then will stop at the holding company. Is that correct? Because now it’s going into multi it’s a limited partnership. So there’s multiple people.

Brian:
Really, the thing is we have this thing called the us constitution, you know, and, and the constitution has the full faith and credit clause. And so it doesn’t matter what state you are in. If you have a Wyoming LLC, and you have an Ohio property and you’re getting sued in Ohio, you know, still are gonna exercise that Ohio judgment. You can’t run from judgements because of the full faith and credit clause of the constitution. And so you can have a really strong charging order in Wyoming, but if your lawsuits not coming through Wyoming, because you have no assets in Wyoming, Wyoming, whoever’s still gonna have to give full faith and credit to another state’s court orders in judgments. So all your due, it’s just causing a little bit more expense on the person suing you to make additional arguments, which is just filing a motion and showing up in court.

Brian:
And then it’s just some piercing, the corporate bail arguments, which for real estate, it’s very, very easy. So charging order protection. Yeah, it’s worth having some to drive up costs to, to way potentially like low bearing fruit lawsuits. But when is an actual real injury or damage, no plaintiffs attorney in the world is gonna care where, you know, you set this up and simply because you have the constitution full faith and credit clause. So it’s, it, it it’s just scaled up. It adds another layer of moats, but as you scale up you up with the limited partnership, so that then you can add a third layer and the most important layer, an asset protection trust, because then the idea is essentially get the assets out of any us jurisdiction if push comes to shove and that way you don’t need to recognize

Charles:
Them. Interesting. Okay. And tell us more about that, that, that last portion of it.

Brian:
Yeah. I think the best way to do it is just to talk about it historically and jurisdictionally. And so that’s the final layer of protection that I was talking about, the bad weather layer, the asset protection trust and trust have been the longest lasting entities of all entities. And they go back to even the Roman times of holding assets when you’d go off to fight and you’d put ’em into a trust and someone else would watch them for you, but when done, right, they’re very strong and can be sculpted to fit how you need them, you know, and they can morph as you need them without dealing with funding issues. Like if you don’t fund an LLC properly, that’s gonna be one way to Pierce, to know LC, or if you overflow it, underfund it. So I just love trust and having a trust at the very top of your planning is just very powerful.

Brian:
And this is where creating an asset protection trust and more importantly, picking the proper jurisdiction to create them and coming into play. And so trust come in a lot of different flavors and types. I think people lump them all into one category because they just look at, well, I have a trust. I have a revocable living trust or a family trust, and they think they’re all the same, but they’re not the standard 1 0 1 trust that everybody is familiar with from the sixties is that family revocable living trust a typical estate plan trust don’t die. So when you do, you actually, you know, and you actually funded the trust, your, you know, like by transferring the title and ownership out of your name, into the trust, you don’t have to go through the courts and probate. And it, you know, it changed the landscape of estate planning from there.

Brian:
The next level up of protection of trust is that higher level trust the asset protection trust. And these trust came about in about the 1980s, like 1984, I think it was out of the cook islands and what these really are, are called self settled. Spinif trust. Meaning they’re created by you for yourself as your own beneficiary with creditor protection, from spin provisions. This lets you protect your assets while you’re living from creditors and not having to relinquish any control. So you can keep investing how you want. The difference is they allow you to protect the assets, not just from you, you know, for your grandkids, but for yourself, you know, which wasn’t allowed in the past before asset protection trust came into about now the difference with asset protection trust really comes down to where you set them up in and why it’s so important is that the laws and the rules that govern you and trust and business as entities they’re different from one jurisdiction to another.

Brian:
This means from one country to another one state to another, even one county to another. And so you really have three options when you’re creating asset protection trust, you can create them domestically in the us, or you can set them up offshore in another country like the famous cook islands, or you can create a hybrid for the historical context. The offshore trust came first in 1984 on the famous cook islands. They’re the ones that actually created the first self settled spin thrift asset protection trust. I prefer the power of going offshore when it’s needed, just because it’s the best home court advantage. And the power of the foreign offshore trust is that it has this fancy word, statutory non recognition. That’s why it’s the global gold standard for over 40 years. What this means is that your us judgment or any judgment in the world is just completely worthless in the cook islands.

Brian:
You would have to start the case all over from scratch, facing the highest legal standard in the world, the murder standard, which is beyond a reasonable doubt. The plane, if the person suing you is gonna have to front all the court costs and fly a judge in from New Zealand, that if they lose, they pay, which we don’t have that system here in the us. There’s only a one year statutory limitations, timeframe. And so by the time whoever’s suing, you realize it’s like, oh shoot the jurisdiction’s over there that time’s already run. But the, the negative of this is if you’re purely foreign, not everybody needs that level of protection for most. It’s overkill, you know, nine outta 10 clients don’t need to be purely foreign. And honestly, it’s just a, you know, it’s a hard pill to swallow. You have a lot of IRS compliance to school.

Brian:
Soldiers that you have to make is really expensive to be purely foreign. So then what you see people do is they want, you know, to go a little bit cheaper and they don’t wanna deal with the IRS hurdles. So they just created domestic asset protection trust. The domestic asset protection trust came 10 years later from the cook islands. They actually brought in the same people who created the cook, you know, the cook island statutes here to the us of all places, Alaska was the first state to create them. And then, you know, Delaware, Wyoming, and the other states followed suit on Nevada. And then not to be outdone, like I said, we have about 20 states now domestically that have some sort of self settled SPIF legislation, but the problem with the purely domestic us based trust or, and why they fail on effectiveness is just like we were talking about before the us constitution, the full faith and credit clause, you can’t run from judgements.

Brian:
And we even have a case kill cover Steelman 2012 from California that said, Hey, you California residents, we don’t have self settle, Spencer legislations in California. We’re not gonna let you go to Nevada and create an asset protection trust in Nevada because you’re not a resident of Nevada, so too bad. And that was upheld by the court of appeals. And so because of the case law that we’re seeing, I’m not a big fan of anything purely domestic because we’re seeing domestic asset protection, trust, crumble, but the offshore component we really want, but it’s very expense. I prefer what’s called a bridge trust. It’s a hybrid of the two. What you’re doing is just combining the best of both worlds. You know, it’s a fully registered foreign cook island trust, and it’s already registered offshore from day one the day you created and fund it.

Brian:
But then you build back a bridge for the IRS to classify the trust as a domestic us trust. And that’s just by staying in compliance with us section 77 0 1, the court test and the control test. And so because of that bridge, it’s cheaper to create. It’s more flexible. You have none of all those annoying IRS compliance and disclosures, you know, and really no IRS tax filings at all because it’s a grantors trust. It’s just classified domain, but then if you ever have to have that strength of the offshore statutory non recognitions, we just drop us compliance. And now you’re a fully foreign asset protection trust. And how long does that take when something happens like that with one of your clients to create the trust or to drop the statute,

Charles:
Drop the, like something happened if they found themself in Dures

Brian:
Oh, under duress. Well, what happened with that is you would just call me and say, Hey, Brian, you know, like I’m being sued first. We would tell you like, Hey, you know, Charles, calm down, let’s see how bad it really is. Most of the time it’s not gonna be as bad as you think. You know, it’d be like me walking in with the Flipp and flipper and seeing just a train wreck of a house and panicking and wanting it to run out and them seeing a gold mine, you know, it’s just, so for me, I’m used to seeing, you know, threats all the time, every day, all day long. Now let’s say you’re that one outta 10 person that this is bad. I agree with you, you know, and you’re gonna probably lose. And this is a big lawsuit. We have a case we’re tracking right now at one of our clients in New Jersey, who is a landlord, was renting out his apartment.

Brian:
One of his apartments to happen to be a gang member in there had a party gang fight broke out. And one of the people inside got shot and killed, who was getting sued, the owner of the building for negligent security, wrongful death. So now we’re having to track this case and see what happens with this. And when we have to, you know, drop compliance, but it happens within a day or two, like we would just track the case. And if we agree, cuz cases take a long time to you know, filter through the legal system. And we would just say, Hey, this is bad. Me. The lawyer will declare a state of, Dures not you, it’s gonna be from my point of view. And then I’m gonna let you know, we’re declaring a state of arrest. You’re gonna sign an acknowledgement. And that will take one minute of, you know, like we’re on the phone. Like you sign it, get it back to me, you know, scan it. And then I’ll scan that over to the offshore trustee once they receive that acknowledgement, it’s, you’ve broken the USC section 77 0 1 standards, you know, with a core tested control test, because we now removed you as the initial trustee. Once one of those legs fall, it’s no longer classified as an I, you know a domestic trust is purely foreign at

Charles:
That point. Wow. And then that’s when they would start you, it’s a whole different thing with your taxes too. Like the fact done everything like that, but everything’s protected though. So

Brian:
Exactly. If you’re staring down that a barrel at that moment in time.

Charles:
Yeah. It doesn’t matter what you’re paying

Brian:
For tests. It doesn’t matter. Yeah. You’re just, you’re just looking at protecting, you know, the assets and the equity at that point. Giving yourself the, you know, non recognition settling cases for pennies on the dollar, once the case settles and goes away, then you can decide if you want to, you know, have that, have the trust become domesticated again or not.

Charles:
Okay. So a couple things here just to, so you have the holding company, it owns its ownership of your LLCs and every state speci state specific that’s gonna own properties in. And and then what are, what are your clients actually putting into all of these into the holding company versus into the LLCs like rental properties, LLCs, I’m sorry, but continue

Brian:
I say that’s a great, yeah, that’s a great question. Generally. You place risky assets that need keys or insurance for them. You’re like can go boom, like real estate cars, boats, planes into LLCs. Then those LLCs are owned by the management company. The limited partnership you place non-risky assets like cash and passive syndication shares that you’re just the, the limited partner on into the, directly into the management company, you know, or even your personal brokerage accounts. And the management company, if you’re the sponsor on a syndication, then it’s be through an LLC. Ideally you want nothing in your personal name. You’re like, just like the rich, they don’t own things. The business entities and trust do. So risky assets going to LLCs and non-risky assets can go directly into the management company. And then the trust owns everything.

Charles:
Interesting. Do your clients also have like any kind of ask, like, like bank accounts or anything outside of this holding company or it’s just very little money in it and they just, yeah,

Brian:
So they have their personal bank account and then they just pay themselves through, as they need to withdraw the money, you know, for expenses and make disbursements from the management company to their account. Like generally you don’t want to keep more than like 25,000 to 50,000 in cash in your account, like 50,000, even a lot. Yeah. You know, so have as bare, minimal as you want, because the easiest thing someone’s suing you can get access to is your cash. Then from cash, I look at equity then from equity, brokerage accounts and, you know, business assets and then piercing veils into other assets.

Charles:
Okay. So you’ve seen a lot of litigation other than not having a solid asset protection plan. What are other mistakes you’ve commonly seen real estate investors or high net worth families make?

Brian:
Yeah, I see, like not leveling up their insurance as the plan, you know, their, the insurance plans or leveling up their asset protection structure as they grow. Like, just think of the ad is like where you starts, not where you’re ending. Mm-Hmm <affirmative> so where you create your business entity and structures and planning, you’re gonna outgrow it at different stages. And so you’re planning, a structure has to grow with you and especially as your asset classes grow another one is not involving their team members like their CPAs and lawyers and what they’re doing before they’re doing it. And then we have to play catch up. And generally then the client, it created a big mess. I’ve had one client with, you know, like hundreds of millions of assets in, which was horrible for them, but I understand why the CPA did it, you know, cuz they just cared about taxes at the time, but they put, you know, hundreds of millions of dollars into, of real estate into an Corp and then wanted to exit the S Corp for us to protect it.

Brian:
But I was like, well, unless you’re willing to cut a massively huge multimillion dollar check to the IRS, I’m really not gonna be able to, you know, empty out this escort for you and not marry many people have that much money just sitting around in the bank that they can just cut and not worry about it. So we had to come up with our wealth managers that come up away an exit strategy at the end of the day, you know, over time. So they’re, they’re not involving a lawyer who’s specifically involved in asset protection, the beginning and then they overgrow and grow too fast and they can’t exit the position. And so that’s where you need to have the right team members in place beforehand, because it’s really easy to make a lot of money in real estate. You know, like it’d be amazing how fast you’d become a millionaire. If you invest properly in real estate, the issue is then if I have to make an adjustment, how much money are you gonna be paying for the IRS or not? Another one is not funding the plans at the right time. Or we creating the structure and the plan. Then you have some firms for more like legal zoom type entities that say, here’s your shell, go fund it yourself. And they forget to fund it. Or, or another big one is just thinking that their insurance alone will solve all the problems. Yeah.

Charles:
Interesting. Yeah. That’s so you still how your all of your clients so have them get umbrella policies is well for them like driving and all their different liability for their own personal personal residents like that additional liability. You always, they should always keep on increasing that to, like you said cover where they are in their, in, in their wealth and where they are in what they own. Yeah.

Brian:
And then just realize the, the limitations of insurance at the end of the day. Like you have to have insurance and having good insurance and level up as you go, but just realize also, you know, like insurance doesn’t cover you for, you know, potential wrongdoings or intentional acts and any it’s good for little things, you know, and what insurance does is provide you capital at the end of the day. Now the way ask protection works is we stay neutral on the liability side. You know, it really doesn’t matter. You know, like what we’re doing is just taking the assets themselves and moving them to a safer place. But you wanna have insurance just realize, anytime you get sued in big lawsuits, there’s gonna be allegations of fraud. And then what’s gonna ha and that can be just simply from an email because an email isn’t intent, I intended to type on my computer and click send that’s an intentional act intent doesn’t mean you’re trying to be a bad person or it can just be like, Hey, you know, Charles, the plumbing was done. Yes. And then there’s a massive issue on that. Well, you sent an email, a judge is gonna say that email, that writing was an intent to write now insurance defense 1 0 1 is gonna come in and say, now that that judge, there was an intent, there’s an element of an intentional wrongdoing that is based around this case. We’re not covering you if you think we’re wrong, Sue us. So now you’re being sued while you have to Sue your insurance provider to try to get coverage for it. And that’s a horrible double-edged sword to be playing.

Charles:
Yeah, no, it’s good for people slipping on ice, which I’ve had before, number of times that places, but where they just want on 10 or $15,000. But it’s a whole different thing, obviously if like your client in New Jersey and that’s quite the predicament to find himself in. Yeah.

Brian:
Or you got like mold issues. Those are tend to be really big, really big claims as well. And yeah, so you just, you gotta have insurance just understand the, the place for,

Charles:
Okay. Interesting. One last question before we run a fun ship, everything here what are some of the main factors that have contributed to your success personally, Brian, and in your business? Yeah, that’s a,

Brian:
That’s a great question. I love, I love those type of questions. I invest in myself in my mindset and so like I learned to manage my mental state get rid of all the toxic dysfunction in my life. You know, I did a deep analysis of all my con my personal contacts and business contacts and anybody in my life to just see, you know, like who are winners and hold and losers. Who’s there to make me stretch and grow. Who’s holding me back, you know, and who are the distinction between confidants and constituents? Who’s a confidant and who’s a constituent, you know, and I really just took responsibility over my life and my happiness and how I manage every second minute, day, week, month, and year of my life. I do a lot of reading and a lot of reflection and meditation. And I just don’t let fear drive me or paralyze me. And I always just have been very driven in my life. Just, you know, as an individual, I just realize if I’m gonna fall, I’d rather be the one that fall and not give somebody else a chance to fail. And if I do fail, I’m just gonna fail, falling forward, get back up and, and give it a go again.

Charles:
Awesome. That’s fan fantastic advice. So how can our listeners learn more about you and your firm? Yeah, they can

Brian:
Jump on my website, www dot BTB, legal.com. I have it more of an educational platform with lots of case law frequently asked questions, cause I’d rather you just be prepared and knowledgeable when you’re going down this route. That way you can ask the proper questions before you start talking to somebody or you can email me B R I a N BTB legal.com. You know, like I’m, I like answering people’s questions because like I said, you need knowledge.

Charles:
Yeah, no, it’s definitely, I think most people listening to this and most real estate investors aren’t even aware of this. So it’s something that thank you so much for coming on today and letting us kind of pick your brain of all these different asset protection plans and then faults that we have been kind of taught as real estate investors with everything that’s going on now. So thank you so much. And looking forward to connecting you with you in the near future here.

Brian:
Absolutely. Thank you.

Charles:
Hi guys! It’s Charles from the Global Investors Podcast. I hope you enjoyed the show. If you’re interested in get involved with real estate, but you don’t know where to begin, set up a free 30 minute strategy call with me at schedulecharles.com. That’s schedulecharles.com. Thank you.

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About Brian T. Bradley

Brian T. Bradley, Esq. is a leading Educator and nationally recognized Asset Protection Attorney for High-Risk Professionals, Entrepreneurs, Real Estate Investors and Ultra High Net Worth Families. Brian’s goal is to give you peace of mind knowing your assets are safe. Brian was selected to the Best Attorneys of America List 2020, Lawyers of Distinction List 3 years in a row 2018 through 2020, Super Lawyers Rising Star List 2015, nominated to Americas Top 100 High Stake Litigators List. He also writes and teaches on High-End Asset Protection. Brian has been a featured guest on numerous Investing, Real Estate, Cashflow, Finance and Coaching shows.

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